Information & Ethics Committee on April 2nd, 2019

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

So it's a real estate play.

[Dan Doctoroff]

Real estate is one piece of it.

A second, as we were discussing earlier, is that we have suggested as an option that we would be prepared to finance infrastructure that otherwise wouldn't be able to be financed, it appears, in the ordinary course.

Third is that we think we'll hopefully develop a small group of products that would be operational here, which we think have the potential to be taken beyond Toronto into other markets around the world.

Those are really the basics—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

To pick up on that last point, as I understand it, if I have Nest in my home, are you talking about a product like that but for capturing information in a public way?

[Dan Doctoroff]

Not necessarily, at all. Let me give you an example of a product that we think is really interesting and important.

With regard to the way we manage our streets, one of the real questions is, how do we gain more people moving through our streets more efficiently without having to build more of them?

We think the management of curbs and streets dynamically is a very important aspect of the cities of the future, let alone here. The question is, could you create a product that would take data that might include data about traffic? It might include—which we'll come back to—de-identified data about people, about LED lighting, for example, embedded in the streets in order to reduce the number of streets that are necessary, to save money, but more importantly to enable greater throughput.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

So there's an analytics and potentially a tech that you can bring to bear in some ways with the various sensors as well, presumably.

[Dan Doctoroff]

Correct.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

It's very far away from the traditional business model, so you can confirm, I suppose.... It was in the documents, but it's still a little difficult for me to understand, given the traditional Alphabet modernization model as a—

[Dan Doctoroff]

I think you have to dismiss the notion that our business model has anything to do with Google's, because it really has nothing to do with it.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

So there will be no monetizing of personal information.

[Dan Doctoroff]

We have no interest in monetizing personal information.

Look, maybe I should speak a little personally. My background is not as someone who has been with Google. My background, in fact, and where I sort of made my mark, is as a public servant. I was the deputy mayor of New York in the first six years after 9/11. I think both I and many of the members of our team consider ourselves to be place-makers or city builders. We're really interested in finding ways to improve urban life in the 21st century.

I know that sometimes, because of our affiliation with Alphabet and Google, people have a hard time believing that. Yes, as a company we do have an obligation to actually earn a reasonable rate of return on the capital they invest in us, but I can tell you that every single person at Sidewalk Labs is committed to that mission. That's what we're here to do. We believe we actually have an opportunity to do something truly remarkable here. We know that we can't do it alone. In fact, all we're trying to do is put forth a proposal that the people of Toronto and Ontario and Canada have the opportunity to vote on and hopefully get excited about.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I have two more questions. The first is specifically with respect to privacy by design and de-identified data. I assume from your previous answer that none of that information is being then combined with other information held by parent companies. That's appreciated.

There were also resignations. There has been some public consternation in the media with respect to resignations specifically on the privacy issue. You have, I think to your credit, brought privacy experts in, and—a little bit worrying—some leave. What assurances can be given that those concerns raised by those experts who have resigned are being adequately addressed?

[Dan Doctoroff]

I think the ultimate comfort you can get is that we can't do anything unless Waterfront Toronto, the relevant governments and privacy regulators all sign off on it. Again, remember that all we did was agree to spend our own money to develop a plan that we hope people will be excited about. At the end of the day, on every issue, including privacy and data, if we can't satisfy people, then we can't move forward.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

With my last question, I want to pick up on that note. In your materials there were two examples. In one example, if Sidewalk Labs collects information, it would be open immediately and usable by others. In another example, a smaller company might want to monetize that information. Who makes that decision, fundamentally? You hinted that it won't be yourselves. In your view, is it a public-facing body that is making that decision?

[Dan Doctoroff]

What we have suggested...and it's just a proposal, to some extent filling the void that has existed that we discussed earlier. In our proposal, we think an independent body, which could be under the auspices of a government or be a more independent body called a “civic data trust,” ought to be responsible for that data. Our hypothesis is that any time someone wants to use urban data, they have to make a detailed application. We would be in the same position as everyone else to the data trust for approval of the use of that data. That application would include what data is being collected, how it is going to be used, whether it will be open going forward and what kind of investment they actually have to make.

Part of what we want to do is make sure that we find the right balance between ensuring that there is adequate privacy protection and at the same time not completely chilling innovation. But those decisions would not be ours to make. Ultimately, the data trust, at least in our proposal, would then have oversight, once something has been approved, to ensure that the rules are being complied with.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thank you.

[The Chair, Conservative, Bob Zimmer]

Next up for five minutes is Mr. Kent.

[Peter Kent, Conservative, Thornhill, ON]

Thank you very much.

Mr. Doctoroff, I don't think anyone on the committee would quibble with your public service in the city of New York; your record is pristine, I believe. I don't think anyone would quibble with the noble objectives of Sidewalk Toronto that you outlined, but in the absence of the final plan, given the opposition by some members of Toronto council, the opposition we're told that exists quite deeply within Queen's Park, the provincial government, I just have to ask, for the record—and you may smile at this—is Sidewalk Toronto one of your parent company's, one of Alphabet's, famous moon shots?

For the benefit of other committee members, the Alphabet moon shots are audacious projects in which large amounts of money are invested, but if these projects don't pay off, the company walks away from them. I learnt from an article recently that Alphabet's moon shots last year, these ventures it walked away from, lost $865 million, which is quite a bit more than the $50 million you represented here.

Is there any way that Sidewalk Toronto could be considered a moon shot by your parent company?

[Dan Doctoroff]

We don't believe that's the case. We spend an awful lot of time with our parent bringing them up to speed on everything that is happening here, and we believe that they are extremely excited about what we are doing.

I should also point out that, speaking for the three of us and the other roughly hundred people at Sidewalk Labs, of whom about 27 are now in Toronto, that none of us think of it as a moon shot. I'm 60 years old, almost 61, and I could be doing lots of different things. I believe that I am spending what may be the last major phase—and this project isn't going to happen fast—of my career on something that I think is extraordinarily important where we can make an enormous difference.

[Peter Kent, Conservative, Thornhill, ON]

Sidewalk Toronto has maintained in various situations that you're still on the hunt for finance partners, but the Globe and Mail last month came up with a company document that suggested you had already locked down some financial commitments. Is there any truth in the document that the Globe and Mail says that it obtained?

[Dan Doctoroff]

Well, let me first correct the record and give The Star credit for finding a leak. The answer is that one of the things that we have heard throughout our extensive consultations with many parties here is that there's a real interest among Canadian companies, pension funds and development firms in potentially participating alongside us.

Our intent has never been that we should be the one to develop everything. We'd love to have partners, and we'd love to have Canadian partners in this, and so we are open to them, but it is not true to say that we have locked down financing for anything.

[Peter Kent, Conservative, Thornhill, ON]

Thank you.

You mentioned earlier that your first contact with Mr. Brodhead came after the RFP process, but as you know, as you mentioned, he was the chief of staff to the Minister of Infrastructure, and I'd just like to ask whether you had any contact with Minister Sohi's office before the RFP process?

[Dan Doctoroff]

I did not, and I don't believe anyone at Sidewalk Labs did at all. As Mr. Lasher said, we were incredibly diligent about following the rules of the RFP.

[Peter Kent, Conservative, Thornhill, ON]

Google last year established a record in the amount of money it spent lobbying in Washington, D.C., of $21 million, I think. I understand that records show that you've registered 40 people to lobby the City of Toronto and provincial government, and eight, including yourself, to lobby the federal government.

To a lot of people, that would seem, compared with Facebook, which claimed they didn't have any lobbyists in Canada when they testified before us, to be a pretty heavy emphasis on lobbying.

[Dan Doctoroff]

I'll ask Mr. Lasher to elaborate a little bit, but the reality is that the vast majority, because of the nature of the lobbying rules.... Anybody who talks to government basically has to register as a lobbyist.

[Peter Kent, Conservative, Thornhill, ON]

Facebook didn't.